![]() Implications: The past two decades saw the installation of costly information management systems that promised reductions in transaction costs. The chief reason for the large gains in added costs is a rise in pay in the financial services sector, where computerization was most pervasive and consumes about one-third of all IT in the U.S. If identical calculations were based on the median ratio of transaction costs to the cost of goods - which offers a more conservative view of the situation-that rise would have been slightly more than double that percentage. This estimate offers the most optimistic interpretation of what the additional costs were. firms to spend $273 billion more in transaction expenses in 2000, or 14% more than indicated by the ratio that worked for the firms in 1990 ($1.91 trillion vs. The steady gain in the average transaction expenses necessary to support the costs of goods and services caused U.S. But from the accompanying chart based on the Compustat data, we can examine the evidence of what more than a decade of exuberant IT spending has delivered. When corporations proposed investments in IT, reductions in transaction costs always showed up in projections of "tangible" gains. In effect, corporations were placing larger bets on the prospective payoffs from computers than on investments in any other means of production. I focused on recent trends in corporate costs while companies were installing computers at a rate that was growing more than three times as fast as spending on all other business equipment. I used the latest compilation of year 2000 annual reports by Compustat to examine financial results. So the tail-to-tooth ratio should be declining.Īs I've said before, those claims are myths. In short, the biggest benefits are lower transaction costs. Computerization, they claim, accelerates communication, simplifies workflow, automates clerical tasks, delivers improved intelligence, eliminates redundancies and helps integrate diverse activities. But IT executives should care greatly, because consultants, IT vendors and most government economists have long assumed that the more IT you have, the lower the transaction costs. Customers don't care how much a corporation spends on accountants, personnel administration, advertising, lawyers, computers or executives. ![]() What's embedded in the cost of goods sold is what customers recognize as the value they receive. It can give you a good idea how much overhead (which economists define as "transaction costs") is necessary to support the delivery of a dollar's worth of goods and services. The corporate tail-to-tooth ratio, which I have been watching for more than 20 years, is defined as the cost of sales, general and administrative expenses to the cost of goods sold. Tail is everything else, such as support staffs and the Pentagon-based command. It defines teeth as whatever delivers combat power. Tooth and Tail is a trademark of Pocketwatch Games, LLC.The "tail-to-tooth" ratio is a favorite measure of the Marine Corps. With matches lasting from 5-12 minutes, controls designed specifically for the gamepad, and split-screen couch play, Tooth and Tail is a popcorn RTS for veterans and newcomers alike. ![]() With procedurally generated maps and customizable factions, no two conflicts will be the same, forcing players to strategize rather than memorize. A darkly humorous tale of riots and revolution is told through an extensive Single Player campaign. The Longcoats, the Commonfolk, the KSR, and the Civilized are in the midst of a Civil War over who gets to eat, and who has to be the meat. From the designers of Monaco: What's Yours is Mine, Tooth and Tail is a Real-Time-Strategy game featuring Single Player, Online Competitive Play, Split Screen, Replays, and more.īuild a base, lead your army, eat your enemies! ![]() ![]() Lead the revolution with an army of flamethrowing Boars, mustard gas-lobbing Skunks, and paratrooper-puking Owls. ![]()
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